Thursday, 4 August 2022
Public Accounts and Audit Joint Committee; Report
by leave—I present the report of the Joint Committee of Public Accounts and Audit of the 46th Parliament, incorporating a dissenting report, entitled Report 492:governance in the stewardship of public resources: inquiry into Auditor-General's Reports 11, 31 and 39 (2019-20) and 2 and 9 (2020-21). The report was presented out of session in the Senate after the prorogation of the previous parliament.
Report made a parliamentary paper in accordance with standing order 39(e).
by leave—The report touches on five different auditor-general's reports: Implementation of the Digital Continuity 2020 Policy;Management of Defence Housing Australia; Implementation of the Commonwealth Scientific and Industrial Research Organisation (CSIRO) property investment strategy; Procurement of strategic water entitlements; and the much talked about Purchase of the ‘Leppington Triangle’ land for the future development of Western Sydney Airport.
I won't detain the House or bore the House by commenting on all aspects of the report, but I do want to make a couple of brief remarks on the Leppington Triangle matter, which was the subject of enormous public and parliamentary attention. It was, of course, where the former government, in their wisdom and brilliance, paid over $30 million for a piece of land that the Auditor-General found was worth $3 million. Indeed, it tied up a lot of the previous audit committee's work, dealing with rorts, waste and incompetence, be it in grant programs, procurements or, in this case, purchase of the land.
The less talked about fact, though, is not just the actual cash, the taxpayer money, that was paid for a piece of land—at 10 times its value—but also what we could well term the 'and we'll throw in free steak knives and the kitchen sink' package to incentivise an unwilling seller. It was a package of incentives. You'd love to deal with the Commonwealth if you were selling them land under these circumstances. They saw us coming from a distance. Under the former minister in the former government, the department threw in a lease, generous infrastructure provisions, a tunnel, which was uncosted, under an airport access road and changes to the master plan—in the coming decades, when they want to build another airport runway there, you can guess who's going to be on the hook to move the infrastructure; it's going to be the poor old taxpayer—as well as other sorts of works.
I want to record the important fact that it wasn't just the outrageous overpayment for the land; it was the whole package of incentives that sat around this to incentivise an unwilling seller. In the Auditor-General's words, the purchase 'fell short of ethical standards'. In my six years on the audit committee, the word 'ethics' is used so rarely in the Auditor-General's reports. I think we're going to see it used a little bit more in the ones coming through the pipeline. That's just a prophetic projection. The committee's report also agreed:
… the Department did not undertake all reasonable steps to determine what a suitable cost would be for the Government to acquire the property, to demonstrate that the price paid for the property represented an efficient, effective, economical and ethical use of public funds …
The committee found that it was just not appropriate.
In terms of the recommendation, I will just make this point, and I want to put it on the record for the parliament as someone who, in a former life, under governments of both political persuasions, did use compulsory acquisition powers as a public servant. The committee's view, and this was a bipartisan recommendation, was that, pending any systemic changes, there should be 'a clear default presumption that compulsory acquisition powers shall be used for land acquisition', that the starting point for any agencies, be it infrastructure or other departments, that want to go out and purchase land in these circumstances should be the use the compulsory acquisition powers—they should not get sucked into this incentivising an unwilling seller and end up paying vastly more than we should with taxpayers' money—and that 'off-market' voluntary acquisitions should only be used:
… when carefully justified and thoroughly documented, in which case compulsory acquisition methodology should be used as a benchmark to help ensure that a situation like the Leppington Triangle purchase does not happen again.
I think that's a really important point to note. If the compulsory acquisition powers had been used—it's a mystery. The Auditor-General could never find why the initial decision to use the compulsory acquisition powers was diverted from, but if compulsory acquisition powers had been used, we would not have had this situation. I commend the report to the House.